Tuesday, June 12, 2007

Climate change: the lack of an interim policy

Parliament is back in session today, and Question Time looks like it will have an interesting question from Hone Harawira:

What response can he make to the Waiareka Valley Preservation Society’s claim that the "Holcim cement plant will release up to one million tonnes of CO2 per annum.", which "makes a mockery of the commitment by both leading political parties to reduce emissions of carbon dioxide."?

It's a question we should all be asking. A million tons a year is more than 1% of gross emissions (from one site), and will cost the New Zealand public at least $15 million / year (according to Treasury's lowball estimate), or $30 million / year (according to realistic expectations). And it will keep costing us that for the lifetime of the plant - at least 25 years. And while both parties have committed to devolving that cost and reducing emissions through emissions trading, they've also committed to gradual introduction which will see industrial emitters get a holiday for all of CP1. Which means there's no strong price signal telling Holcim to factor the price of emissions into their business model, and nothing telling them to reduce emissions now.

If this is giving you a sense of deja vu, its because we're about to repeat the same mistake we made in the 90's. For those with short memories, in the early 1990's, New Zealand signed up for the UNFCCC and made big promises to reduce emissions. We then completely undermined this by allowing the construction of a series of gas-fueled electricity plants - Taranaki Combined Cycle, Otahuhu B, Southdown - which saw electricity sector emissions skyrocket and created a lasting problem for the future. The then-National government ignored concerns about emissions on the basis that they'd be covered under the carbon tax voluntary reduction emissions trading policy they were designing. But apart from the fact that those policies never eventuated, the construction of those plants "locked in" those emissions as a permanent part of our profile. And we'll be paying for that mistake come January 1st next year.

In both cases, what is lacking is an interim policy, something to fill the gap and reduce emissions until the long-promised emissions trading regime begins. In the 90's, we were briefly able to use the RMA to do that, though the government put a stop to it very quickly. There's a bill before the House - Jeanette Fitzsimons Resource Management (Climate Protection) Amendment Bill - which would allow us to do it again. While the RMA was an imperfect tool for controlling greenhouse gas emissions, even an imperfect tool is better than nothing - and certainly better than letting emissions rise while you wait around for a perfect tool to come along.